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Boeing re-captures Turkish airline Pegasus with MAX jet order

Published 12/19/2024, 11:53 AM
Updated 12/20/2024, 03:10 AM
© Reuters. FILE PHOTO: Airplane fuselages bound for Boeing's 737 Max production facility await shipment on rail sidings at Spirit AeroSystems headquarters  in Wichita, Kansas, U.S. December 10, 2024. REUTERS/Nick Oxford/File Photo
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(Reuters) -Boeing has secured a firm order from Turkish low-cost carrier Pegasus Airlines for a hundred 737 MAX 10 jetliners, winning back a major customer from Airbus in a boost for the U.S. planemaker's largest single-aisle model.

The order, which Boeing (NYSE:BA) said on Thursday includes options for another 100, marks the biggest MAX order this year and caps a tumultuous 12 months for the U.S. planemaker following management and financial upheaval after a mid-air blowout on a nearly new 737 MAX in January.

The deal is worth $5.85 billion after typical industry discounts, according to estimated delivery prices from UK-based Cirium Ascend. Boeing shares rose 2.6% on Thursday.

Airbus shares were down 0.5% in early trade in Paris on Friday.

The unexpected reversal for Airbus comes a year after Pegasus indicated it would stick to its current supplier for its next jet order.

The budget airline has long been a battleground between plane giants, driving hard bargains to defect to Airbus about a decade ago and now switching back to its original supplier.

"We respect the choice of our customer. We will continue to stand by them and serve them with their existing Airbus fleet," an Airbus spokesperson said.

Boeing's mid-air blowout led to stricter regulatory oversight, which exposed significant production safety and quality problems. A strike shut down almost all Boeing jetliner production for seven weeks.

The company raised $25 billion to shore up its battered finances.

With the strike over, Boeing cautiously restarted 737 production in early December, Reuters first reported.

With the Pegasus order, Boeing has orders for more than 4,300 737s, including over 1,200 for the 737-10, the largest model in the MAX family, according to the company.

However, the U.S. Federal Aviation Administration (FDA) has not yet certified the MAX 10 and the MAX 7, the smallest model, due to problems related to the engine anti-ice system.

Deliveries are expected to begin in 2028, Pegasus said. Planemakers get most of the cash when the jet is delivered to a customer.

Boeing expects to continue burning cash next year, CEO Kelly Ortberg said in October. 

© Reuters. FILE PHOTO: Airplane fuselages bound for Boeing's 737 Max production facility await shipment on rail sidings at Spirit AeroSystems headquarters  in Wichita, Kansas, U.S. December 10, 2024. REUTERS/Nick Oxford/File Photo

Pegasus, which has seen a rapid recovery in travel after the pandemic, told Reuters this year it was working on a jet order to continue its fast-paced growth into the next decade.

The airline will consider converting its options for 100 more MAX 10 aircraft into firm orders in the coming years depending on market conditions and fleet needs, Pegasus Airlines CEO Güliz Öztürk said in a statement.  

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